Oakland Seeks Monetary Help to Fight Foreclosures

November 13th, 2008

Oakland Seeks Monetary Help to Fight Foreclosures
Oakland, having the 10th highest rate of foreclosure in the country, has showed that it is in a bad condition. Oakland is competing with various other cities with high foreclosure rankings such as Sacramento, Fresno, Stockton, and Bakersfield. The Federal Housing and Economic Recovery Act offered almost $4 billion to both local and state governments to rehabilitate and buy foreclosed homes. Out of that money, Oakland received $8.2 million. By Dec. 1, the city has to project its solutions to help residents who are affected by this real estate crisis.

In 2008, the California State Department of Housing and Community Development plans to distribute $145 million to those areas that are troubled greatly by this real estate calamity. Cities having the highest percentage of foreclosures will get priority by the state. These homes had been financed by sub-prime loans. The increasing rate at which these sub-prime loans are supposed to reset is one of the determining factors.

In this year, nearly 3,800 of the sub-prime loans in the city have been adjusted or reset to a greater interest rate. It is the expected that this figure will escalate in the next years as several sub-prime loans are planned to reset. Apart from this, according to recent statistics, the real estate crisis of foreclosures is expanding and the mortgage loan resets with the adjustable rates will not completely reach the top until 2011.

Beverly Williams, a resident of Oakland said, “It’s extremely distressing for me to see the number of houses vacant on the streets,” and “This is urgent, and we have to stop people from losing their homes.” Beverly Williams leads ACORN or the Association of Community Organizing for Reform Now, a community organization, which works for moderate and low-income families. This organization is working along with banks and city officials to change sub-prime mortgages and make them conventional loans to let the working families regain their homes. In the last three years, nearly one out of four single-family houses in Oakland has received a foreclosure filing.

ACORN along with another nonprofit community organization known as Urban Strategies Council, is trying to restore affected neighborhoods and redevelop the forlorn residential properties. They are planning to purchase the foreclosed houses and sell off the homes at low-interest loans to the residents of the area. Andy Nelson, the director of Economic Opportunity Programs at the Urban Strategies Council said that, “This is just one strategy,” “…there is no one size policy fits all. We need to be creative about the use of public funds to fix the problem.”